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Are you sure you are not overpaying?

If you work on a business development side of the domain names industry, at some point you need to do the market research and price analysis. Here is the approach we find the best working for the job of commercial product management:

Identify the list of your closest competitors

Write down everyone you know, ask your colleagues, industry experts or use sites like namestat.org, newgtldstat.org or domainnamestats.com to compile the list.

Collect information

Now that you have the competitors list, it’s time to collect their prices for operations with domain names: register, renew and transfer. Make sure you file additional costs, such as ICANN fee or a processing fee in a separate column.

 Analyze the market

    1. What is the minimum price for operation?
    2. What’s the max price? 
    3. What is the median price – meaning, what is the average price half of the companies sell for? I suggest using the median instead of average, as it is not distorted so much by the small portions of extremely high or low prices, and thus better represents the market state.
    4.  Which companies offer the cheap registration and cheap update, add what are their additional costs, if any.

Pro tip:  always calculate the cost of owning a domain for a minimum of 2 years (this is why we recommend to identify minimum price for both registration and renewal). Most of the companies drop the price for the first year and make renewal excessively expensive, which leads to a high % of non-renewed domains and high churn rate.

Here is an example calculation for 100 .com domains:

 BuyRenewAdded costs2 years cost
Cheap buy$500.00$856.00$18.00$1,392.00
Cheap renew$785.00$785.00$61.0$1,692.0
Openprovider$599.0$805.00$54.00$1,512.0

So, even the lowest registration price does not guarantee a low total cost of ownership. This is why the calculation of 2 years domain price gives higher precision.

Feel free to use the attached template: fill it in with your numbers, see how you measure against the market and find the best price for your domains.

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